As if to say, “I can spend other people’s money as well as anyone,” and of course, not to be out-promised by Obama, presidential hopeful John McCain recently offered his pledge of $300 Million to the developer of a cheaper and more efficient electric car battery.
The question I posed about Obama’s promises to the auto industry is just as applicable here:
I wonder what it feels like, to be able to pledge Peter’s money to Paul, with no consequences or accountability. Just wondering.
Pledging other people’s money is, quite simply, the wrong way to go about anything. It is a $300-million promise to point a gun at you, at me, at everyone. A promise to steal from each and every one of us, in order for some lucky engineer to get rich.
News flash: the first engineer who develops such a product is going to get really stinking rich, anyways. And I don’t mean drives-a-Cadillac-and-has-four-bathrooms-in-his-house rich. I’m talking about wipes-his-ass-with-$100-bills rich. Shits-caviar rich.
We don’t need John McCain promising to make him (or her) even more rich.
Over at Cafe Hayek, Don Boudreaux wonders:
Perhaps part of Sen. McCain’s health-care proposals will be to offer a taxpayer-funded prize of $300 million to whoever invents a safe pill that cures cancer.
Boudreaux was interviewed by the Denver Post’s David Harsany, and in an op-ed piece, the two highlight the importance of the market’s allocative function, in determining where, how, and in what proportion to one another will scarce resources be used, and towards what ends they will be put. Harsanyi opines thusly:
McCain makes it seem that a cure for oil is just beyond our grasp. Around $300 million away.
Such is the hubris of central planning. The “$300 million” figure is probably about as arbitrary as arbitrary can be. There are several problems:
- Either $300 million is too much in which case the same technology (or a substitute technology) could be developed more efficiently without government’s ham-fisted intervention.
- Or $300 million is not enough in which case the grant distorts the market, and subsidizes the profitability which the market doesn’t need.
In either case, the lure of $300 million funnels resources away from otherwise productive activities, making it difficult for substitutions to emerge because their competition receives federal subsidy.
Bad economics is bad news and it makes bad policy. But by far the most objectionable aspect of McCain’s proposal is not that he should’ve flunked Econ 101, but rather that the pledge is a $300 million gun.